Friday 6 December 2019

Businessman who hid €5.3m from wife in divorce case was 'deliberately dishonest'

The Four Courts in Dublin
The Four Courts in Dublin

A businessman's concealment of €5.3m in assets from his wife - when divorcing her - was described by a judge as "consciously and deliberately dishonest".

He must pay now his former wife at least another €2.26m in addition to whatever provision was agreed under an earlier settlement of family law proceedings following a Supreme Court ruling.

The issue of whether he must pay a further €240,000 depends on the outcome of further High Court proceedings concerning whether he would have gained a personal benefit from a €650,000 cash bond included in the €5.3m valuation.

The Supreme Court's Mr Justice William McKechnie described as "entirely justified" a High Court judge's finding the man had been consciously and deliberately dishonest and that he knowingly committed perjury and deceit.

In a 2009 High Court judgment, Ms Justice Mary Irvine ruled the man was dishonest and committed perjury in failing to disclose four specific substantial assets valued at €5.3m. 

In rejecting an appeal by the man over orders arising from the divorce decree,  Mr Justice McKechnie said in his many years dealing with family law matters, he had "have never known of, or come across, a case where a party has so blatantly acted and where nothing short of utter contempt has been shown to the court".

He added: "These matters should not simply be let rest here."

A three judge Supreme Court unanimously ruled, despite the man's material non-disclosure and consequent failure to make "proper provision" for the first wife in the earlier family law proceedings, the decree of divorce could stand as the High Court had jurisdiction to make orders for proper provision in the first wife's later proceedings.

In his separate judgment, Mr Justice Frank Clarke said he would have "very grave" reservations about overturning the decree, especially as it would affect the interests of others, including the man's second wife who married him "in good faith" on the basis of a court order he was divorced.

The court retained discretion, at least in divorce cases, to decide appropriate procedures whereby any issue concerning a deliberate failure to disclose assets can be resolved, he said.

The Supreme Court decision, rejecting the man's appeal against High Court orders in favour of his first wife, is significant concerning the courts' jurisdiction to address proper provision and other remedies in family law proceedings where there has been material non-disclosure of assets. 

It upheld Ms Justice Irvine's decision that, given the non-discloure of the man's assets during earlier family law proceedings settled several years earlier, it had jurisdiction to address proper provision.

Mr Justice Clarke rejected the man's arguments the settlement of the earlier family law proceedings prevented her seeking further provision on the basis of a deliberate failure to disclose assets.

The first wife had argued the divorce should be set aside on grounds of his deliberate failure to disclose the full extent of his assets during earlier proceedings.

She had brought judicial separation proceedings against him which, after a 23 day hearing, ultimately settled on terms involving him later instituting divorce proceedings.

A decree of divorce was granted and various financial provision was made under a settlement of both sets of proceedings made in 2001.

After the divorce, the man remarried.

His first wife brought her further proceedings after discovering he had allegedly not dislosed significant assets in the proceedings leading up to divorce.

She sought a variety of orders which raised the possibility the entire order made in the earlier proceedings, including the divorce decree itself, would be set aside and also sought additional financial provision to reflect "proper provision".

The second wife was joined to those proceedings due to the possible impact on her should the first wife succeed.

In her judgment on those proceedings in 2009, Ms Justice Irvine ruled the man had been consciously and deliberately dishonest and committed perjury in failing to disclose four specific substantial assets valued at €5.3m.

She directed a payment of €2.5m should be made to the first wife as her share of the value of the undisclosed assets, including €500,000 to reflect the court's inference it was likely there were more undisclosed assets worth more than €1m.

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